Brexit: Time is Running Out For Businesses
With the end of the Brexit transition period ending on 31 December, time is quickly running out for UK businesses to prepare for an increasingly likely ‘no deal’ scenario. That’s the key message from government in a new campaign launched this month.
The challenge for the business sector is, there are still many unknowns despite fewer than 100 days to go to the end of the year. At the time of writing, negotiations between the UK and the EU had stalled and, with a matter of weeks to go, no deal seems almost inevitable.
The campaign
The government has unveiled a 'time is running out' campaign and is urging business leaders to step up preparations for Australia-style arrangements based on ‘simple principles of global free trade’, from 1 January 2021. On 31 December, the UK will have left the EU’s Single Market and Customs Union.
The government’s call to action comes ahead of the latest phase of its public information campaign emphasising the increased urgency to prepare for the end of the UK transition period.
Unanswered questions
HM Revenue & Customs has already written to 200,000 traders who trade with the EU to set out the new customs and tax rules coming into place and how to deal with them, for instance, new customs procedures for businesses selling goods to the EU, changes in data protection rules, a new immigration system and process for businesses employing foreign nationals, new requirements for work travel from the UK to the EU.
But there remains many unanswered questions for businesses, particularly those who export goods or professional services to the EU, and their legal advisers. There are, for instance:
· Concerns as to whether or not they need to register for VAT for the countries with which they wish to trade.
· What rules of original will apply from 1 January.
· A lack of guidance on the movement of goods between Britain and Northern Ireland.
For professional services firms, it is vital to check the validity and recognition of the qualifications of professional staff as they may not be recognised by EU regulations in the absence of further agreement.
The Chancellor of the Duchy of Lancaster Michael Gove warned: “Make no mistake, there are changes coming in just 75 days and time is running out for businesses to act. It is on all of us to put in the work now so that we can embrace the new opportunities available to an independent trading nation with control of its own borders, territorial waters and laws.”
There will be a guaranteed set of changes for which businesses will need to prepare, and government has urged all UK businesses to check online at gov.uk/transition to see what action they need to take. But this will not cover all aspects of a particular business’s needs or concerns.
According to the British Chamber of Commerce, by late September just 38% of firms had completed a Brexit risk assessment this year. Covid-19 has, undoubtedly, been forefront of the minds of businesses but the fact is, there will be no extension to the transition period.
This means firms must act now to protect their business as far as they can once the transition period expires.
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